The radio broadcast industry has historically struggled with financial distress for decades, first in its battle against the television networks since the 1950s.
Then, the battle intensified as internet music streaming began to grow in the 1990s.
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IHeartRadio, the nation’s largest radio station chain, filed for Chapter 11 bankruptcy in 2018, handing control of the network to its lenders in exchange for $10 billion in debt.
Related: Popular whiskey and wine company files for Chapter 11 bankruptcy
Audacy, the second-largest radio station owner in the country, on Jan. 5, 2024, filed for Chapter 11 bankruptcy, seeking to reduce its debt from $1.9 billion to $350 million and hand ownership of the company to its bondholders.
The company’s CEO, David Field, said at the time that “The perfect storm of sustained macroeconomic challenges over the past four years facing the traditional advertising market has led to a sharp reduction of several billion dollars in cumulative radio ad spending.”
Audacy was known as Entercom Communications in 1968 when it was founded by Joseph Field, the father of David Field. The company bought CBS Radio and its 117 stations in 2017, before changing its name to Audacy in 2021. Â
Later last year, High Plains Radio Network, which operated 18 radio stations in Texas, New Mexico, Colorado, Oklahoma, Mississippi, and Arkansas, filed for bankruptcy in March 2024.
AccuRadio files for Chapter 11 bankruptcy protection after reaching an impasse in lawsuit negotiations.
Image source: Shutterstock.
AccuRadio files for bankruptcy facing lawsuit
And now, online music streaming service AccuRadio filed for Chapter 11 bankruptcy protection after reaching an impasse in negotiations with SoundExchange in seeking a lawsuit settlement over royalties owed for its services, according to a company statement.
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AccuRadio filed its petition in the U.S. Bankruptcy Court for the Northern District of Illinois in Chicago on May 14 to restructure its debts, listing $500,000 to $1 million in assets and $10 million to $50 million in liabilities.
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The Chicago-based debtor’s largest creditors include SoundExchange with a secured claim over $9 million; ASCAP, owed an unsecured claim of over $205,000; BMI, owed an unsecured claim of over $202,000; AdSwizz, owed an unsecured claim of over $18,000; Amazon Web Services, owed an secured claim of over $17,000; and Triton Digital, owed an unsecured claim of over $11,000.
“AccuRadio has spent almost 25 years building an innovative and well-loved music streaming service while facing royalty obligations that climbed to levels that seem to suggest the system is rigged, perhaps inadvertently, against small and midsize streamers,” AccuRadio CEO Kurt Hanson, who founded the firm back in 2000, said in a statement.
“The Copyright Royalty Board’s rate-setting process leaves small and midsize players out of the process because the extremely high costs of lawyers, expert witnesses, and discovery make participation virtually impossible,” Hanson said.
SoundExchange filed a lawsuit over royalty payments
SoundExchange filed a lawsuit against AccuRadio on July 19, 2024, to recover alleged unpaid royalties owed to music performers and rights owners.
SoundExchange was designated by the U.S. government to administer the Section 114 sound recording license to collect and distribute digital performance royalties on behalf of more than 700,000 music creators.
SoundExchange’s litigation against AccuRadio is subject to an automatic stay while the bankruptcy case proceeds.
AccuRadio offers more than 1,400 music channels tailored to adult listeners. The independent service has been 100% advertising-supported for over two decades, with an audience of over a million listeners a month, according to the statement.
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